DCE Council Approves Contract, Detailed Rules of PP Futures

The forty-eighth session of the Second Council of Dalian Commodity Exchange (DCE) recently deliberated on and adopted the Contract of the polypropylene (PP) futures and the Amendment to the related detailed rules, which means that the PP contract long anticipated by the market has accelerated the pace of listing.

After the official approval of the PP futures, DCE issued the “Notice on Soliciting Opinions on PP Futures Contract and the Related Rules” on January 17, openly seeking opinions on the PP futures contract and the related rules from the market. Since the opinion solicitation ended on January 27, DCE has earnestly considered the opinions and communicated with the opinion sources, forming the Contract and the Amendment to the related detailed rules to be submitted to the DCE Council for deliberation.

A DCE official said that the feedback from the market shows that the member units and the industrial clients have highly recognized the designing of the PP Contract and rules, especially the industrial clients who hope to see the product listed as soon as possible to facilitate their production and operation, control risks and improve the hedging efficiency, etc. They also believed that the sound operation of LLDPE, PVC and other petrochemical futures has provided experience and foundation for the designing of the PP futures contract and the market operation in the future, thus having full confidence in the successful operation and functioning of the product after the listing.

Market analysts believed that according to the preparations previously made by the exchanges during the period from the official approval to the listing of a new product, on the official approval of the China Securities Regulatory Commission (CSRC), the exchange would usually solicit opinions from the market openly and submit the contract and the rules to the council for deliberation after studying the opinions. After the adoption by the council, the application for listing will be immediately submitted to the CSRC. It is therefore estimated that the PP futures contract is likely to be listed and traded in the first quarter of the year.